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Amur Minerals wants own smelter at Kun-Manie, sees 15 year mine life

Operating costs are estimated at US$ 34.86 per ore tonne, while total initial capital expenditure is projected to be US$1.38bn.
Amur Minerals wants own smelter at Kun-Manie, sees 15 year mine life
“As we worked on the study, we challenged all past and previous assumptions.

Amur Minerals (LON:AMC) will build its own smelter and refinery to process ore from the Kun-Manie nickel mine in Far East Russia.

The group was recently awarded its mining permit and today spelt its plans to move the project into production in an operational blueprint.

With the aid of some more infill drilling, target output will be six million tonnes with the mine to be in production for at least 15 years.

Production will come from four open pits and two underground operations, while a simple flotation concentrate will be generated to be smelted by the company itself.

Operating costs are estimated at US$34.86 per ore tonne, while total initial capital expenditure is projected to be $US1.38bn to be expended in a two year construction period. 

Sustaining capital is estimated to be US$ 474mln over 15 years.

On this basis, the net present value using a 10% discount rate is projected to be US$0.71bn and US$1.44bn using the long term nickel prices of US$ 7.50 per pound and $US 9.50 per pound 

Robin Young, chief executive, said the operational blueprint represented ten years of exploration at Kun Manie, alongside a total redesign of the project. 

“As we worked on the study, we challenged all past and previous assumptions. 

“As a result, mining will best be performed using a combination of underground and open pit productions, power will be generated on site, a substantial access road upgrade can be supported and the construction of own smelter and refinery.

First steps will work on a definitive feasibility study (DFS), from which production and financing decisions will stem.

Infill drilling at Flangovy and Kubuk will start the work on the DFS, while additional metallurgical test work will be  required to determine how ores will respond to treatment at the plant and what final products will be derived from a potential smelter.

Losses in 2014 were US$1.36mln (US$3.83mln),

Amur said its cash position was US$ 6mln at 17 June.

Shares rose 13% to 32.7p.

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